Banks vs Mortgage Brokers – Pros and Cons

Looking to purchase your dream home? The first step to your dream home is to secure financing. When searching for mortgage you can use a mortgage broker or deal directly with the bank. In the past, banks were the only source when shopping for mortgage. However, in the recent years independent mortgage brokers have been becoming popular. In this article you will see the difference between using a bank and independent mortgage broker.

Securing your financing through bank

Pros of using the bank

Consumers prefer to use banks because of the trust they build with them over the years.

Long working relationship with the bank could enable to receive better terms and rates.

Cons of using bank

Banks don’t have access to many lenders, unlike mortgage brokers, the options are limited.

You will have to negotiate to be able to get the best rate for yourself.

Securing your financing through mortgage broker

Pros of using a mortgage broker

When you decide to use a mortgage broker with your financing options, they will act as a representative between you and the lending institutions and their assistance is free of charge to borrowers.

Mortgage brokers negotiate the best available terms and rates. They also work with several lenders in order to find the financing options that fit your needs.

Mortgage brokers have access to lenders who specialize in working with consumers who have less than perfect credits.

Mortgage brokers have flexible hours, which means they are more accessible and available to address your needs and concerns.

Mortgage brokers are independent which means it is in their best interest to make consumers happy in order to build stronger bonds.

Cons of using a mortgage broker

Mortgage brokers only get paid when the loan is approved. Which means they are working for the lending institution as well.

It is important to find a reputable mortgage broker so they are not favoring a particular lender. At times institutions may offer better deals in order to generate more business.

In conclusion, both of the options have advantages and disadvantages. In order to secure the best mortgage for your needs it would be ideal to try both and compare their products and choose what’s best for you. However, keep in mind that applying with numerous different lenders or brokers will have a negative impact on your credit score.